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## Dominic pays 7% interest on his $18,000 college loan and 12% interest on his $13,000 car loan. What average interest rate does he pay on the

Question

Dominic pays 7% interest on his $18,000 college loan and 12% interest on his $13,000 car loan. What average interest rate does he pay on the total $31,000 he owes? (Round your answer to the nearest tenth of a percent.)

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Mathematics
3 months
2021-08-09T11:45:12+00:00
2021-08-09T11:45:12+00:00 1 Answers
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## Answers ( )

Answer:

9.1%

Step-by-step explanation:

Simple Interest = Principal × Rate × Time

First, converting R percent to r a decimal

r = R/100 = 7%/100 = 0.07 per year.

Solving our equation:

A = 18000(1 + (0.07 × 1)) = 19260

A = $19,260.00

I = A – P = $1,260.00

A = 13000(1 + (0.12 × 1)) = 14560

A = $14,560.00

I = A – P = $1,560.00

Total interest = $1,260.00 + $1,560.00

$ 2820

What average interest rate does he pay on the total $31,000 he owes? (Round your answer to the nearest tenth of a percent.)

Simple Interest = Principal × Rate × Time

Time = 1 years

Simple Interest = Total Interest = $2820

Principal = $31,000

Interest rate = Simple Interest/Principal

= $2820/$31,000

= 0.0909677419

0.0909677419 × 100

9.096774194%

Approximately to the nearest tenth of a percent = 9.1%